Nikkei Index Gains 3% in Week; Steel Output Rises

Chandrasekhar Atreya
19 Nov, 2010
New York City

Nikkei benchmark index posted a 3% gain for the week. Mongolian President invites Japan to develop rare earth market. A survey shows that China may have eased supplies of rare earth minerals to Japan. Crude steel output rises for the 12th consecutive month in October.

[R]5:00 PM Tokyo, Japan – Nikkei benchmark index posted a 3% gain for the week. Mongolian President invites Japan to develop rare earth market. A survey shows that China may have eased supplies of rare earth minerals to Japan. Crude steel output rises for the 12th consecutive month in October.[/R]

Automakers, precision instrument makers and other exporters traded higher on the weaker yen and boosted the benchmark index in the morning session. The index opened positive tracking gains in the U.S. and European markets.

The Nikkei 225 Stock Average gained 0.09% or 8.76 to close at 10,022.39 and the broader Topix also gained 0.1% to close at 869.52, highest since July 14. For the week, the Nikkei gained 3.06% while the Topix gained 2.69%.

Better-than-expected reading of business conditions in the U.S helped the greenback recover some of its earlier losses against the euro and the yen, with the dollar reaching above 83.60 yen not seen since October 5.

However, the Finance Minister cautioned reporters at a news conference after a cabinet meeting that the index may fall again and drop below the 10,000 level since the Japanese economy remained at a standstill with weak output and exports.

The outlook for rare earth imports have improved according to 16 Japanese companies as reported in a survey by the Ministry of Economy, Trade and Industry released on Friday.

The ministry polled 34 companies with 32 responding to the survey and 16 of the respondents said they were informed by the Chinese suppliers that they have specific customs clearances for supplies of rare earth minerals.

Asahi Glass Co said today that, working with a university professor, it had developed a florescent lamp that uses an electrode made from alumina cement thus removing the need for rare earth.

Alumina cement is normally an electrode insulator whose internal structure changes when processes in a vacuum to make it conductive. The electrode consumes 30% less power and can quadruple the life of the florescent lamp, the company said.

Mongolian President Tsakhia Elbegdorj, who is currently visiting Japan, said his country welcomes the entry of Japanese companies into his country’s rare earth market.

“Japanese companies should be the first ones to enter the market, rather than only observing what other countries will do. He also said the governments of both countries have agreed to do their best to prepare the environment needed to enable Japanese firms to develop the minerals in Mongolia.”

Crude steel output rose 8% in October to 9.51 million tons from a year ago, up for the 12th month in a row, the Japan Iron and Steel Federation said Friday.

Financial Services Minister Shozaburo Jimi is miffed that the Government Tax Commission is considering scrapping tax breaks on stock investments.

“It is totally beyond my comprehension since our most immediate challenge is to exit from deflation,” said Jimi while talking to reporters after a cabinet meeting.

The government’s waste cutting panel latest review that ended on Thursday marked twenty eight programs for scrapping besides recommending budget cuts for 23 and denying funds for another 16 programs.

If adopted in full, the recommendations would save for the government some 200 billion yen, based on initial requests.

Stock Movers

Toyota Motor Corp, the world’s largest carmaker, added 1.56% to 3,265 yen. Mazda Motor gained 1.72% to 237 yen.

T&D Holdings Inc rallied 3.01% to 1,953 yen after reporting better than expected profits and MS&AD Insurance gained 0.47% to close at 2,123 yen.

Nomura Holdings Inc closed up 1.64% to 495 yen. JX Holdings gained 3.74% to 527 yen on better than expected earnings.

Elpida Memory Inc, the chip maker, jumped 5.7% after Daiwa Securities Group Inc recommended the stock with a ‘buy’ rating.

Credit Saison declined 2.8% to 1,315 yen, while Fuji Heavy Industries fell 1.76% to 615 yen.